Circuit City's Canadian ops seek court protection

Mon Nov 10, 2008 1:22pm EST
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TORONTO (Reuters) - Circuit City Stores Inc's Canadian operations filed for creditor protection in an Ontario court on Monday following the lead of the U.S. parent.

The Canadian subsidiary, InterTAN, operates or licenses 772 electronics stores and dealer outlets the country under the banner The Source by Circuit City. It appeared before the Ontario court hours after its U.S.-based parent company and 17 affiliates filed for Chapter 11 protection from creditors. The parent's filing was with the U.S. bankruptcy court in Richmond, Virginia, where it is based.

Circuit City filed one week after saying it would close 155 stores, or more than a fifth of its retail base, and eliminate 17 percent of its U.S. work force.

InterTAN said in a release that all the Canadian stores would remain open and would be fully staffed.

In a court filing on Monday, InterTAN said it had assets of C$218.6 million ($182.2 million), including C$148.1 million of inventory, C$50 million of current accounts and notes receivables, and C$5.8 million in cash.

The filing also showed that it had total liabilities of C$110 million consisting of C$89.5 million in current liabilities and C$20.2 million in long-term liabilities.

Circuit City's filing terminated InterTAN's credit facilities, the filing showed.

Ed Sellers, a lawyer representing the company, said the Canadian subsidiary had no choice but to seek the court's protection, which he said "was triggered by the filing in the United States".

Justice Geoff Morawetz was expected to make a decision later on Monday.

($1=$1.20 Canadian)

(Reporting by Scott Anderson; Editing by Peter Galloway)